ADVOCATES:Neal Kumar Katyal - Acting Solicitor General, Department of Justice, for the United States as amicus curiae, supporting the petitionersPaul Bender - for the respondentsPaula S. Bickett - for the petitioners

Facts of the case

Arizona taxpayers challenged the constitutionality of Arizona's tuition tax credit in an Arizona federal district court. They alleged the tax credit violated the Establishment Clause of the First Amendment because it funneled money to private religious schools. The district court dismissed the case. On appeal, the U.S. Court of Appeals for the Ninth Circuit reversed, holding that the taxpayers had standing to bring their suit and had alleged a viable Establishment Clause claim.

Question

Do the plaintiffs lack standing because they cannot allege that the Arizona tuition tax credit involves the appropriation or expenditure of state funds?

Anthony M. Kennedy:

The Arizona Tax Code allows private individuals to claim dollar-for-dollar state tax credits for contributions to school tuition organizations, and these are called STOs.

The STOs, school tuition organizations use the private contributions to provide scholarships to students attending private schools, and these include religious schools.

A group of Arizona taxpayers sued the Director of the Arizona Department of Revenue.

The taxpayers contend that the Arizona's STO tax credit constitutes a subsidy of religion in violation of Establishment Clause principles.

The Court of Appeals for the Ninth Circuit reached the merits of that argument.

It concluded that the taxpayers had stated a valid claim under the Establishment Clause.

We now reverse.

The Court cannot reach the merits of taxpayers Establishment Clause claims unless it finds that the Court has jurisdiction to resolve the dispute.

And an essential element of federal jurisdiction is the requirement that the parties have standing.

They must show, not only that they've suffered an actual injury that was caused by the illegal action complained of, but also that the injury would be remedied by a judicial decree.

Under Article III of the Constitution, standing is a necessary ingredient if any case or controversy appropriate for resolution in federal court.

Case and controversies are constitutional terms that define an Article III jurisdiction.

Respondents contend that they have standing to maintain this action for one and only one reason, because they are Arizona taxpayers.

But the mere fact that someone is a taxpayer, does not normally establish standing.

In general, people do not have a continuing legal interest in ensuring that their tax payment -- payments are spent in a lawful manner, and this principle is well settled.

Now, to overcome that general rule against taxpayer standing, respondents rely on an exception, and the exception is contained in a opinion announced by this Court in 1968, that's the case of Flast versus Cohen.

Under Flast, individuals suffer a particular injury when in violation of the Establishment Clause and by means of the Tax Code, their property is transferred through the Government's Treasury to a sectarian entity.

And as the Flast Court put it, "The taxpayers' allegation in such cases would be that his tax money is being extracted and spent in violation of specific constitutional provisions against such abuses of legislative power."

Flast recognized that under the First Amendment's Establishment Clause, taxpayers suffer a unique injury, a violation of conscience, when their funds are extracted and spent in service of an establishment of religion.

Here, the respondents are taxpayers.

The STO tax credit does not extract and spend their funds in service of an establishment.

Rather, the taxpayers are free to pay their own tax bills.

They could also contribute to a religious or secular STO of their choice, or they could obtain a different tax credit by making a different charitable contribution.

The STO tax credit is not tantamount to a religious tax.

The Court's opinion today concludes that the taxpayers also fail to satisfy the other requirements for Article III standing.

STO contributions result from the decisions of private taxpayers regarding their own funds.

As a result, any injury the objectors may suffer would not be fairly traceable to the State.

And the court order, prohibiting operation of the STO tax credit, would not affect respondents or their tax payments.

Because there is no jurisdiction to hear the taxpayers' lawsuit, the judgment of the Court of Appeals must be reversed.

Justice Scalia has filed a concurring opinion in which Justice Thomas joins.